Mortgage interest and PMI on your primary residence are deductible for AMT purposes.
I suggest you review tax code and form. There is an overriding 26% which removes all deductions. That is the one I have been hitting due to LTCG. Its at the bottom of the form where you calculate diff between taxed and 26% rate… and if amount is less than 26%, you pay 26%. (Unless less than 173k, at which point 28%). Also Mortgage deductions get added in on line 4, form 6251. It is not near as simple as above and as you make it. I have already run the numbers.. and I would not get the deductions.
I think you are assuming that I am clearing maybe a few thou $ at most in LTCG. Last year my LTCG was $37k after finding every possible loss in my portfolio to hide it (by selling the loss position and then buying back after 31 days). Tax year 2005, it was nearly $60,000 in LTCG (after doing the same with negative positions). The combination of 15% rate on LTCG and taking the resulting CA income tax as a deduction really alters the picture. (California taxes LTCG as income at 9.3% which is deductible on the fed by itemizing).
